TAUC Summer Summit: Tackling the Big Issues in Cincinnati (Part 1 - McGraw-Hill's Bob Murray)
The TAUC 2014 Summer Summit - a special half-day conference for all members of the tripartite union construction community - took place in Cincinnati, Ohio on Wednesday, August 13. If you weren't lucky enough to attend, here's a brief overview of the event - and you can click here to download selected PowerPoint presentations!
(P.S. - Mark your calendars now for our next half-day conference: the State of the Union Construction Industry Forum, scheduled for Wednesday, December 10 in Washington, D.C. It's free to attend, and we'll be sending out registration information soon, so keep your eyes peeled!)
Starting Off With a Home Run
TAUC kicked off the Summer Summit on Tuesday night with a special pre-event gathering at the Great American Ballpark in downtown Cincinnati. Unfortunately, the hometown Reds lost a heartbreaker to the visiting Boston Red Sox, but attendees still enjoyed unseasonably cool weather and spectacular views from the open-air Machine Room Patio (not to mention complimentary hot dogs, hamburgers and popcorn).
Cincinnati Mayor John CranleyOn Wednesday morning, the Summer Summit officially got underway with a special greeting by Cincinnati Mayor John Cranley. Mayor Cranley welcomed TAUC members to his town -- and promptly apologized for the Reds losing to the Red Sox the previous evening!
Next up was a riveting keynote presentation from Robert Murray, the Chief Economist and VP for McGraw-Hill Construction. He determines the broad forecast pattern used by the company's construction information products and is perhaps best known as the author of the Dodge Construction Outlook.
Murray was hesitant to make any bold pronouncements, and cautioned that there are many different ways to evaluate the available data. However, he noted that several construction contractors he has spoken with believe the economic expansion is gaining momentum. Murray said he was "seeing a little more sense of optimism, with some caveats." Two key construction market indicators show that a recovery is underway. Dodge's "construction starts" metric -calculated by allocating the full value of a project into the month in which work begins - was up 9% in 2013 and is showing continued growth through the second quarter of this year. The "construction put in place" metric, which allocates spending on construction projects on a monthly basis as the work occurs, shows a similar trajectory.
McGraw-Hill's Bob Murray
As for starts within the major construction sectors, Murray presented data showing that residential building, after rising steadily for nearly two years, has leveled off over the last couple of quarters. Commercial and institutional building starts are up, but public works starts have dropped off considerably. See PowerPoint Slide 4:
Murray noted that the institutional market in particular has "taken a long time to turn the corner" after essentially a five-year decline beginning in 2008. "In 2013 it only really began to stabilize…can the institutional building sector finally begin to contribute to the overall expansion?" he asked. "The duration of the decline has been longer for what we saw with commercial building."